Constellation Resources (ASX:CR1) has entered into a binding agreement to acquire the Ularring Copper-Gold Project in Western Australia, from Ramelius Resources (ASX:RMS) subsidiary Breaker Resources.
The Ularring Project has historical copper-gold drilling results and the geology indicates a prospective intrusion related copper-gold system, which has the potential to generate large-scale deposits.
Under the agreement, Constellation will pay $200,000 worth of shares at $0.15 per share. The company also grants Breaker the option to acquire 51% of the interest of the tenements from Constellation upon announcing a resource estimate.
If Breaker chooses to exercise the option, the exercise price payable in cash will amount equal to the greater of four times the in-ground exploration expenditure incurred by Constellation, and $100 per gold equivalent resource ounce defined in respect of the tenements.
Completing the transaction is subject to Constellation finishing due diligence to its satisfaction, and both parties executing a deed of assignment and assumption in relation to any third party agreements relating to the project.
The transaction is expected to be completed within two months.
Constellation, which has a market capitalisation of $10.45 million, proposes to conduct validation programs at Ularring to verify historical soil anomalies and other historical prospects, alongside shallow drilling to infill possible higher grade mineralised saprolite zones and to generate samples for metallurgical purposes.
The company also plans to conduct reconnaissance soil sampling and drilling to uncover additional mineralised oxides, as well as further soil sampling and numerous generative geophysical surveys. The surveys will help to better identify developed sulphide zones.
Ularring represents an opportunity to explore for higher grade copper-gold zones at the Centre Forest prospect, as well as explore regionally along the targeted shear corridor where minimal exploration has been carried out to date.
Historical results have generated copper-gold-bismuth-molybdenum-tungsten soil anomalies using a variety of sampling methods and various analytical techniques. These anomalies lie along strike of Centre Forest and on separate trends.
Constellation Resources is an explorer focused on the Orpheus Project, which comprises six tenements covering 443km2 in a prospective portion of the Fraser Range province of Western Australia.
Write to Aaliyah Rogan at Mining.com.au
Images: Constellation Resources
